The parents of Ashley MacDonald, 18, who was shot and killed by police in 2006, had originally sought at least $40 million each. External investigations had cleared the officers of any wrongdoing.

The parents of a teenager who was killed in a confrontation with Huntington Beach police in 2006 will receive $125,000 from the city in a settlement of their wrongful-death lawsuit, city officials announced Friday.

Ashley MacDonald, 18, was shot by two Huntington Beach police officers after they responded to 911 reports of a woman holding a 4-inch knife walking near a park.

MacDonald's parents filed a lawsuit accusing the two officers of excessive and unreasonable force. The suit sought at least $40 million in compensatory and punitive damages for each parent, Kenneth MacDonald and Lisa Marie Guy.

Investigations by the Orange County Sheriff's Department and the district attorney's office cleared the officers of wrongdoing, saying they were forced into a split-second decision to kill a woman they believed to be dangerous.

On the day she was shot, MacDonald had just finished a night of partying and had gotten into an argument with her mother, prosecutors said. She poked her mother in the stomach with a knife and cut her across the arms, leaving superficial wounds on Guy's wrists.

MacDonald was later seen near a park with the knife. Prosecutors said that when officers ordered MacDonald to give up her weapon, she said, "I'm on drugs, just . . . kill me" before running toward the officers. She was shot 15 times when she came within eight feet of them.

"This was a tragic incident for all concerned and we are pleased that it has come to a conclusion, and that all the involved parties can have some closure," said Jennifer McGrath, Huntington Beach city attorney.

Guy's attorney, Jerry Steering, said his client wanted to avoid a court battle.

"I don't think the plaintiffs thought [the settlement] was fair," Steering said. "But they didn't want another emotional blood bath. There were things that were coming up that were so emotionally debilitating, and evidence that was so prejudicial that would likely come to evidence in a trial that they preferred to take care of it this way."